WRECC Backs Out of Deal With East Kentucky Power Co-op

In May of 2004, Warren Rural Electric Cooperative Corporation said it would leave the TVA, to enter into a contract with "East Kentucky Power Co-op" in 2008.

Warren rural electric president and CEO, Gerald Hayes, says they wanted to make that move to save their customers money. "In some cases as much as 40 percent rate disparity between our residential rate and Kentucky utility's residential rate."

But between 2004 and now, Hayes says the potential 15 percent savings in wholesale power costs they expected with "East Kentucky Power" evaporated.

He blames the projected increases in those costs on higher prices for material and construction, and delays in getting permits.

Hayes says WRECC will stay with TVA, "And the biggest change our membership will experience, will be the fact that TVA will be imposing a Fuel Cost Adjustment, which most all other utilities already have in place."

Hayes says if TVA has to buy additional power off the market, or the cost of natural gas or coal goes up, TVA can pass their additional costs on to WRECC, and that means ultimately on to you, the customer.

"East Kentucky Power" has already acquired some rights-of-way to provide electricity here. Hayes says WRECC may make use of some of those in the future. And he feels they can work with EKP to get out of their contract.

Bottom line, Hayes says warren rural electric's customers will not see any change in their service as a result of this action.

Click WRECC Statement to view the WRECC statement video.

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